Interest income-expense of the year

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Reference no: EM13150144

Jarret owns city of Savannah bonds with an adjusted basis of $100000. During the year, he receives interest payments of $3000. Jjarret partially financed the purchase of the bonds by borrowing $80000 at 5% interest. Jarret's interest payments on the loan this year are $4000,and his principal payments are $900.

a. Should Jarret report any interest income this year?

b. Can Jarret deduct any interest expense this year?

Reference no: EM13150144

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